This article presents a fuzzy model of assessment of the entity's ability to continue as a going concern. The assessment is made by auditors under conditions of ambiguous and imprecise information, and is therefore well suited to the fuzzy set approach which is entirely different from a probabilistic approach based on two-value logic. The basic going concern issues have been presented as well as elements of the fuzzy set theory. Variables of the proposed fuzzy model are expressed in terms of linguistic variables. If-then fuzzy rules of inference are developed to describe the interdependence among variables. To illustrate the process of inference a numeric example is given. The article discusses possible extension of the presented model. The final part provides conclusions and general suggestions for future research.

Keywords: going concern, bankruptcy, fuzzy set theory.
JEL: M42, M41, G33

  Anna Smejda, Application of the fuzzy set theory to assessment of the entity's ability to continue as a going concern - plik pdf; (244 KB)